Property Taxes
This is the one closing cost that is often prorated between the buyer and seller. If the seller has already paid the annual property taxes, the buyer typically reimburses the seller for the period in which the buyer will be occupying the property. Likewise, if the taxes have not yet been paid, the seller typically reimburses the buyer for the period in which the buyer occupied the property.
Transfer Taxes and Recording Fees
This is the cost for transferring ownership of the property and recording the purchase documents. The fee is often calculated as a percentage of the sales price.
Not only is every state different in property taxes, every county is different as well. It could even break down to what city that you live in. Your Loan Officer will be able to tell you the approximate property tax value is based on your home.
Property taxes are determined by the value of the homes. As most homes have appreciated in value in recent years, most homeowners have seen their property taxes increase. Homeowners have the right to challenge the assessed values of their homes. They will need to provide sound reasons to support their arguments.
If you do a refinance transaction and one of your property tax installments is due within 60 days of your closing, most lenders will require that the tax installment be paid before funding. You may also use any proceeds from the refinance to have it paid by escrow or the closing agent.
On all conforming loans that have a LTV (Loan to Value) of 80.01% or more, property tax escrows are required. This means that you need to have your property taxes included in your monthly payment. If you are at 80% LTV or below you have the option to not escrow for property taxes (not inlcude them in your payment), however you will usually have to pay a .25% fee to not escrow them.
With many conventional, conforming loans you will be required to pay 1/12 of the annual taxes every month.
This money will be kept in an escrow account and will be used to pay the taxes as they come due.
Every state is different when it comes to property taxes.
